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Wednesday, February 15, 2012

Mitt Romney on the Auto Industry Bailout – First He Says Let Them Go Bankrupt, Then He Says the Obama Intervention was Terrible, Then He Admits the Industry is Strong and Growing, The He Claims His Recommendation Was Followed and Finally He Claims the Obama Administration Did It Wrong

Confused – You Will Be Even More So If You Read What Mr. Romney Wrote

One of the things that will haunt Mitt Romney should he win the Republican nomination is his opinion piece in the New York Times that had the headline to let the auto industry go bankrupt.Intentional or not, the piece gave the impression that Mr. Romney was fine with the bankruptcy and dissolution of Chrysler and General Motors.Given that the auto industry support by the Obama Administration is one of the great success stories of recent times, it is hard to see how Mr. Romney could do himself any benefit from reminding voters of his past position.

But this is Mitt Romney.So in an opinion piece in the Detroit News he tries to explain his remarks, tries to condemn the Obama administration for its policies, tries to claim credit for the bailout and finally condemns the bailout. First of course Mr. Romney has to make the case that he is a son of Michigan (like he is a son of New Hampshire, like he is a resident of Massachusetts, like he lives in Utah and like he resides in California.).

I am a son of Detroit. I was born in HarperHospital and lived in the city until my family moved to OaklandCounty.

I grew up drinking Vernors and watching ballgames at Michigan & Trumbull. Cars got in my bones early. And not just any cars, American cars.

But the real meat (actually baloney) of Mr. Romney’s piece is his attempt to explain his position on the auto industry restructuring supported by government loans and by government taking an equity position in the auto industry.

Three years ago, in the midst of an economic crisis, a newly elected President Barack Obama stepped in with a bailout for the auto industry. The indisputable good news is that Chrysler and General Motors are still in business. The equally indisputable bad news is that all the defects in President Obama's management of the American economy are evident in what he did.

Wow, he acknowledges Mr. Obama was responsible for the policy, admits that Chrysler and GM are doing well, but even though the results are great, Mr. Obama did it wrong.

A labor union that had contributed millions to Democrats and his election campaign was granted an ownership share of Chrysler and a major stake in GM, two flagships of the industry.The U.S. Department of Treasury — American taxpayers — was asked to become a majority stockholder of GM. And a politically connected and ethically challenged Obama-campaign contributor, the financier Steven Rattner, was asked to preside over all this as auto czar.

This was crony capitalism on a grand scale. The president tells us that without his intervention things in Detroit would be worse. I believe that without his intervention things there would be better.

Of course he omits the major concession unions made in the transaction, and as for crony capitalism, well no cronies of the President profited here. And if things would be much better if the President hadn't intervened then Mr. Obama must not have done what Mr. Romney wanted to be done.

But wait, Mr. Romney says the President did what Mr. Romney recommended all along.

My view at the time — and I set it out plainly in an op-ed in the New York Times — was that "the American auto industry is vital to our national interest as an employer and as a hub for manufacturing." Instead of a bailout, I favored "managed bankruptcy" as the way forward.. . . Ultimately, that is what happened. The course I recommended was eventually followed. GM entered managed bankruptcy in June 2009 and exited it a month later in July.

But wait, what the President did was not what Mr. Romney recommended

Before the companies were allowed to enter and exit bankruptcy, the U.S. government swept in with an $85 billion sweetheart deal disguised as a rescue plan.

By the spring of 2009, instead of the free market doing what it does best, we got a major taste of crony capitalism, Obama-style.

Ok, let's cut through this and tell the truth. The industry could not have been saved without the $85 billion from the government because the free market which Mr. Romney so greatly reveres would not provide post bankruptcy financing without government intervention.So Mr. Romney solution in fact, if not in theory would have been the shut down, dismantlement and demise of Chrysler and GM, along with the hundreds of thousands of jobs the two companies supported.

And course, we finally get to the real source of Mr. Romney’s unhappiness, union jobs were saved.

While a lot of workers and investors got the short end of the stick, Obama's union allies — and his major campaign contributors — reaped reward upon reward, all on the taxpayer's dime

And although he says major campaign contributors benefited, well that is just not true.But truth is never really part of Mr. Romney campaign anyway, so that doesn’t really matter.

And finally just to make the point that in addition to being a Massachusettsian, a New Hamphiran, a Utahian and a Califorian Mr. Romney is also a Detroiter.

Their dream is alive in all of us who have ever called Detroit home. And with a Detroiter in the White House, that dream can be realized once again.

Assuming that is, that the "dream" is the destruction of the American auto industry.Yep that dream could have been realized with Mr. Mitt (Detroit) Romney in the White House.If Mr. Obama stays in Washington, well everyone will just have to live with a healthy and vibrant auto sector. Sorry about that.